IEA, EU discuss plan to release oil and diesel stocks
The International Energy Agency and European Union are discussing a proposal to release oil and diesel stocks amid record diesel prices driven by war and refinery damage. G7 countries agreed on Friday to release 100 million barrels, though analysts say much of this may complete a prior March release
The International Energy Agency (IEA) and the European Union on Wednesday were discussing a proposed release of oil and diesel stocks, sources said. The plan, initially tabled last week, comes after war with Iran and Ukraine damaged refineries and disrupted tanker traffic, pushing diesel prices to record highs and affecting inflation, trucking and agriculture.
Group of Seven (G7) countries agreed on Friday to release 100 million barrels after President Donald Trump warned he might ban US diesel exports if they did not put more fuel into the market. The G7 includes EU members France, Germany and Italy, along with the US, UK, Japan and Canada. It remains unclear how much of the release will be diesel and how much crude oil.
On Wednesday, IEA countries met to discuss the plan, as did the EU's oil co-ordination group, diplomats said. The EU's energy task force was scheduled to hold a call at 1600 local time (1400 GMT), a European Commission spokesperson said.
Polish Energy Minister Milosz Motyka said Poland was ready to release oil and diesel stocks if a consensus is reached, but he did not expect an IEA decision on Wednesday. The IEA advises industrialised countries and coordinates their emergency oil stocks for use during major supply disruptions.
In March, the IEA announced a record release of 400 million barrels of oil from strategic stockpiles to combat a spike in crude prices and supply losses. Of this, about 325 million barrels have so far been released, the IEA said on Friday. EU countries expect the remaining 75 million barrels to count towards the new 100-million-barrel plan, two EU diplomats said.
JP Morgan analysts said much of the release in Friday's announcement would represent the completion of the March release. “Our interpretation of the press release is that the headline 100 million barrels does not represent 100 million barrels of new intervention,” the bank said in a report. Germany's economy ministry said it was working on the approval of the release of energy reserves without mentioning any new amount. “Germany will participate in the further release of the volume already determined by the IEA in March,” the ministry said in a statement.